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Definition of Back-up
1) When bond yields and prices fall, the market is said to back-up.
the period after an announcement of a takeover bid in which stock prices typically rise until a merger or acquisition is made (or until it falls through).
the period before a formal announcement of a takeover bid in which one or more bidders are either preparing to make an announcement or speculating that someone else will.
A security that is collateralized by loans, leases, receivables, or installment contracts
The fee paid on the extension date if the buyer wishes to continue the option.
Brokerage house clerical operations that support, but do not include, the trading of stocks and
An intercompany loan channeled through a bank.
A loan in which two companies in separate countries borrow each other's currency for a
A market condition in which futures prices are lower in the distant delivery months than in
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
Another term for a repo.
The periodic interest payment made to the bondholders during the life of the bond.
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
A bond's interest payments.
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Related: Benchmark issues
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
With respect to a project financing, an arrangement under which the sponsors of a project
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Buying or selling to offset an existing market position.
The amount of securities believed to be available for immediate purchase, that is, in the
Full coupon bond
A bond with a coupon equal to the going market rate, thereby, the bond is selling at par.
The loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon
Group of five (G5/G-5)
The five leading countries (France, Germany, Japan, United Kingdom, and the U.S.) that
Group of seven (G7/G-7)
The G-5 countries plus Canada and Italy.
Group rotation manager
A top-down manager who infers the phases of the business cycle and allocates
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
A legal proceeding for liquidating or reorganizing a business.
Bond with a stream of coupon payments that are the same throughout the life of the bond.
Limitation on sale-and-leaseback
A bond covenant that restricts in some way a firm's ability to enter into
CDs that are issued with the tacit understanding that the buyer will not trade the certificate.
1) Bonds or notes with a long current maturity.
An option that allows the buyer to choose as the option strike price any price of the
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
1) Bonds or notes with a long current maturity.
M1-A: Currency plus demand deposits
Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock
Securities backed by a pool of mortgage loans.
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected
Pass-through coupon rate
The interest rate paid on a securitized pool of assets, which is less than the rate
The length of time it takes to recover the initial cost of a project, without regard to the time value of money.
The loss of cash resulting from a swap into higher price bonds or the need/willingness of a bank or
The gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds.
Related: retention rate.
A bankruptcy in which a debtor and its creditors pre-negotiate a plan or
Pure yield pickup swap
Moving to higher yield bonds.
Raw material supply agreement
As used in connection with project financing, an agreement to furnish a
Sale and lease-back
Sale of an existing asset to a financial institution that then leases it back to the user.
All banks involved in selling or marketing a new issue of stock or bonds
To increase, as in step up the tax basis of an asset.
A bond that pays a lower coupon rate for an initial period which then increases to a higher
Stripped mortgage-backed securities (SMBSs)
Securities that redistribute the cash flows from the
Provision in a company's charter requiring a majority of, say, 80% of shareholders to approve
n event that influences production capacity and costs in an economy.
A price level below which it is supposedly difficult for a security or market to fall.
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
A fee paid to an underwriter in connection with an underwritten rights offering or an
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
A network of trading desks for the major brokerage firms and institutional investors that
A term used to describe a transaction that took place at a higher price than the preceding transaction
New muni bond issues scheduled to come to market within the next 30 days.
Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the
Zero coupon bond
Such a debt security pays an investor no interest. It is sold at a discount to its face price
Related: tick-test rules.
A bond in which no periodic coupon is paid over the life of the contract. Instead, both the
The retrospective process of measuring performance, comparing it with plan and taking corrective action.
The amount added to a lower figure to reach a higher figure, expressed as a percentage of the
A method of investment appraisal that calculates the number of years taken for the cash flows from an investment to cover the initial capital outlay.
The time required to make ready a machine or process for production, e.g. changing equipment
The cost of the supplies used in running an office.
Coupon / Coupons
The periodic interest payment(s) made by the issuer of a bond
The rate of interest paid on a debt security. Generally stated on an
The number of years necessary for the net cash flows of an
A security that makes no interest payments; it is sold at a discount
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
a system using transfer prices; see transfer
equivalent units of production (EUP)
an approximation of the number of whole units of output that could have been
Foreign Corrupt Practices Act (FCPA)
a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and
the time it takes an investor to recoup an
the direct or indirect cost of getting equipment
the cooperative strategic planning,
Detachable certificate attached to a bond that shows the amount of
The dates when the coupons are paid. Typically a bond pays
The nominal interest rate that the issuer promises to pay the
Zero curve, zero-coupon yield curve
A yield curve for zero-coupon bonds;
Zero-coupon bond, or Zero
A bond that, instead of carrying a coupon, is sold
The offsetting of a current year loss against the reported taxable
An increase in the cost of a product to arrive at its selling price.
A capital budgeting analysis method that calculates the amount of
The cluster of one-time costs incurred whenever a production batch is run,
The reorganization or liquidation of a firm that cannot pay its debts.
The interest payments paid to the bondholder.
Annual interest payment as a percentage of face value.
Time until cash flows recover the initial investment of the project.
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